After Katz apology, Edmonton mayor says next step is public discussion with council

Edmonton Oilers owner Daryl Katz.

Photograph by: Shaughn Butts
, edmontonjournal.com

EDMONTON — In the wake of a letter to Edmontonians from Oilers owner Daryl Katz, Mayor Stephen Mandel said team officials must now come to city hall and talk publicly about the new arena deal they want.

Mandel made the comments Saturday night after Katz published a full-page ad in the Edmonton Journal and Edmonton Sun apologizing to citizens and Oilers fans for botched negotiations over the proposed downtown arena.

Mandel said he was informed Friday that there would be a letter in the papers, but did not know what it would say. Earlier this week, Mandel set an Oct. 17 deadline for someone from the Katz Group to detail at an open council meeting what the Oilers’ franchise needs to reach a final agreement on building, financing and operating the arena.

“What’s important is on the 17th for Katz and his team to come to city council to go over a way in which we can do an acceptable deal for all people,” Mandel said when asked for his reaction to Katz’s letter. “That’s really what I’m concerned about.”

Mandel, who had just greeted runners at the starting line of the Alberta Sports & Recreation Association for the Blind’s Night Sight run, said it was not his place to comment on what Katz said or didn’t say.

The letter begins with Katz telling fans that he owes them an explanation for his methods. “I took for granted your support and your love of the Oilers,” he wrote.

“Many people are saying it’s not good enough, but we had to start somewhere,” Iveson said.

“That’s what I mean by a positive development. But, and there is a but, this just opens the door for the next conversation we still need to have, which is what does the Katz Group want and what’s their justification? That needs to happen.”

Katz’s letter comes five days after he sparked a powerful backlash among Edmonton residents by making a trip to Seattle, a city that hopes to secure an NHL franchise.

Katz, along with former Oilers star Wayne Gretzky, team executives Kevin Lowe and Craig MacTavish and club president Patrick LaForge, visited Seattle, Wash., on Monday — the same day Seattle city council approved a wealthy hedge-fund manager’s plan for a new, $490-million arena.

Iveson, who voted against the arena framework, said he supports Mandel’s Oct. 17 deadline for the Katz Group to publicly tell council what they are looking for.

“This opens the door,” Iveson said. “This is a very positive, but very small, step in the right direction. There’s still a lot of work to do for the Katz Group to come to an understanding with our public that will allow us to move forward.”

The Katz Group and the city have been negotiating the details of a new arena deal, but in the past weeks, the talks broke down. Council held a closed-door meeting to discuss new issues raised by the Katz Group, including that the price tag had gone up to $475 million.

Other proposals by the Katz Group included an ongoing $6-million subsidy to help with operating costs and hopes the city will move employees to an office tower to be built adjacent to the arena.

Councillors rejected the company’s request for more public money.

In his letter, Katz said, “In hindsight, I have underestimated the degree to which it would be up to us to make the case for public funding.”

A Katz Group spokesman said they won’t comment further.

Coun. Kerry Diotte agreed the letter is a good first step, but said there is much work still to do.

“Show me the figures of what the Oilers need to be sustainable,” Diotte said. “I haven’t seen any figures. If they’re losing money, let’s see the figures. If they’re making money, let’s see the figures.

“This is public money, so discussions about it should be in public,” he said. “If this is an investment for our city, I want to see what the return is.”

As with most of the debate connected to the downtown arena project, public opinion ranged widely on whether the apology was sincere and whether it should change anything with the negotiations.

Shopping downtown Saturday, Kent Timanson said he thought Katz’s letter was a smart thing to do.

“It’s a PR move obviously, but at the same time, you can’t be mad at someone once they apologize,” said Timanson, a Sherwood Park resident who was wearing an Oilers T-shirt.

He said he thought Katz was honest about his shortcomings in the letter, but that the Oilers owner will need to be more sensitive to public reaction in the future. “I think ultimately that he wants to keep the team here,” he said. “This whole thing was just a bit of a power play and it backfired on him and a lot of fans are ticked off at him.”

Elaine Yip, a 20-year-old who was taking in some of the Alberta Culture Day activities behind the Stanley A. Milner Library, said she is an Oilers fan, but had soured on the idea of a downtown arena in recent months when it appeared Katz was trying to get more out of the city. Reading his Saturday letter swayed her opinion slightly. “It appears like he is trying to be more open minded, or at least appear to be more open,” Yip said. “I personally do want to be optimistic about it.”

Chris Seewalt said he did not think Katz had anything to apologize for, although he recognized that might be an unpopular sentiment among some Edmontonians.

“It’s his team,” the 31-year-old Edmonton resident said. “In my opinion, he’s well within his rights to look at all his options. I’m a fan of this team, but at the end of the day, it’s a business.”

Adam Finn, chairman of the University of Alberta School of Business marketing department, said Katz had to apologize for a series of steps, such as his high-profile Seattle trip, that irritated Oilers fans and many other Edmonton residents.

“Obviously, he’s got to do something, and the strong apology is something you can do as a start-off.”

Making a full-page apology in mass-market papers is not unusual for a company facing problems, Finn said, noting Maple Leaf Foods took similar action during the 2008 listeria outbreak that forced a recall of its products.

It’s important for Katz to take a second step and become more open and honest about what he needs, recognizing he is negotiating with a local government, not another private business, Finn said.

Kenneth Wong, a faculty member at Queen’s University’s School of Business who specializes in marketing, said Katz needed to respond to the sense of betrayal felt by Oilers fans who have supported an underperforming team for years.

“I think this is a classic example of an entrepreneur encountering both the bureaucracy of city hall, and the philosophical constraints and issues that centre on any public arena debate,” Wong said.

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